It’s been a smashing year for Australian based private equity deals, which have already surpassed the total value of deals completed in the 2013 financial year.
Dr Kar Mei Tang, the head of research at the Australian Private Equity and Venture Capital Association (AVCAL) said the results come on the back of last year’s downturn.
“Last year total fundraising fell by 70% as corroborated by ABS numbers released several weeks ago,” she said at a forum in Sydney. “The good news is that with four months to go in the current year, fundraising is already above the total FY13.”
There are a number of important trends emerging, Tang said.
The average fund size has almost doubled from $116 million from the 2004-2008 financial years, to $230 million in the period between the 2009-2013 financial years for growth funds.
For large buyouts the mix of investors has remained relatively unchanged, however in the growth fund area the shift in demographic has been marked, she said.
“Equally noticeable has been the shift in the limited partners demographics, with a substantial increase on inflows from offshore and a corresponding reduction in the sourcing of funds locally over the last five years.”
And she says although private equity has accounted for 43% of all large listing (more than $100 million) on the SASX since 2010, trade sales remain the major exit pathway, accounting for more than 45% of all exit transactions by number.
“There is undoubtedly more optimism in the sector these days, and AVCAL is engaging closely with the government to provide the human narrative on how private equity adds value.”